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Issues involved: Application for waiver of pre-deposit of duty, interest, and penalty based on denial of credit for Service Tax paid on commission agent providing business auxiliary service.
Summary: The Applicant filed an application seeking waiver of pre-deposit of duty amounting to Rs. 30,87,942/- along with interest and penalty of equal amount. The demand arose due to the denial of credit for Service Tax paid on a commission agent providing business auxiliary service. However, a clarification issued by the C.B.E. & C. through Circular No. 943/4/2011-CX dated 29-4-2011 stated that credit for Business Auxiliary Service (B.A.S.) on account of sales commission is admissible. The circular highlighted that the definition of input services allows credit on services used for clearance of final products up to the place of removal, including the sale of dutiable goods on commission basis. Consequently, the impugned order denying the credit was set aside, and the requirement of pre-deposit of duty, interest, and penalty was waived, leading to the allowance of the appeal.
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